Balai to expand stores to 130 by 2023

MANILA, Philippines — Balai Ni Fruitas Inc., the soon-to-list company behind the Balai Pandesal brand, is embarking on an aggressive expansion plan to have 130 stores by end-2023.

The company targets to double this to 200 stores by the end of 2026, said Calvin Chua, director and financial adviser of Fruitas Holdings Inc., its listed parent firm.

Balai ni Fruitas currently has 77 stores spread among the three brands – Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts – as of end-2021, Chua said in a presentation to investors last Friday for Balai’s upcoming initial public offering (IPO) on June 30.

“The company believes that there are significant development opportunities in the Philippines especially in underserved key cities outside the National Capital Region,” he said.

The vast majority of the new Balai Pandesal stores will be company-owned but the company will strategically grant franchises to accelerate its expansion.

Furthermore, Chua said, the company continuously explores future channels of distribution and adopts measures to increase reach and sales in different markets of interest.

At present, Balai products are available in community stores, other Fruitas Group stores, and other online delivery platforms such as Foodpanda and GrabFood.

The company has priced its IPO shares at P0.70 each, for an offering of 325 million primary common shares, with Fruitas, currently its 100 percent owner, selling another 50 million secondary common shares.

Also part of the offer is an over-allotment option of up to 37.5 million secondary shares held by Fruitas.

At P0.70 per share, Balai’s total IPO size is P288.75 million and pro forma market capitalization will be approximately P1.05 billion. Net proceeds, estimated at P203.8 million, would be used to fund its store network expansion, acquisitions and new concept introductions, and setup of commissaries.

The offer period, which commenced last week, will end on June 23.

The company recorded a net profit of P8.5 million last year on revenues of P148.9 million, up 35 percent. Gross profit grew 44 percent to P77.7 million in 2021 from P553.8 million a year ago.

Balai ni Fruitas Inc. is currently a wholly owned subsidiary of Fruitas Holdings Inc which acquired the company in June 2021.